As per Gartner's projections, the worldwide end-user expenditure on SaaS is anticipated to grow steadily at a Compound Annual Growth Rate CAGR of 19.35% between 2020 and 2022. This suggests that SaaS (Software as a Service) businesses have considerable potential for growth, but they are also facing significant competition.
Why Use a SaaS Billing Software?
Increases Workflow & Efficiency
If you do not have a SaaS billing software, your employees will have to manually create invoices and bills for customers, make changes to their subscription plans, and finalize financial records. This can rapidly become overwhelming for any organization, leading to an overstressed workforce.
In the case of a SaaS business that frequently introduces new products, an inadequate billing solution can divert the finance and accounting teams' attention from more important tasks, forcing them to concentrate on routine and mundane activities.
Provides Superior Customer Care
By utilizing a SaaS recurring billing models, you can enhance the level of service you provide to your customers. For instance, leading SaaS billing solutions enable you to provide free trial periods for a specified duration and collect payment details at any time. Some solutions also permit you to offer pause or postpone alternatives to customers.
Offers Higher ROI
If you are a SaaS company, it is likely that you are expanding your product range or market coverage. Adopting the best SaaS billing software can increase the likelihood of a successful expansion.
By automating the process of creating and delivering invoices, you can expedite payment receipt, enhance your cash flow position, and allocate the cash towards growth opportunities worldwide. SaaS billing solutions can also assist you in complying with B2B and B2C regulations, thus helping you enter new markets.
Moreover, reducing involuntary churn can have a significant financial return on investment. SaaS billing software enables SaaS companies to save a considerable number of at-risk subscribers, through targeted solutions using analytics and reporting.
Signs You’re in Dire Need of a Billing Software
- KPI Fluctuations: If your Key Performance Indicators like Monthly Recurring Revenue (MRR) and Annual Recurring Revenue (ARR) are not steady. This may indicate revenue leakage that can be prevented by dunning and automated billing.
- Dissatisfied Customers: If your customer turnover rate is too high or your returning customers are very few, this might indicate a dissatisfied customer base which can be better understood through a SaaS recurring billing platform.
- Frequent Proration Crises: The need for proration management arises when customers change their subscription plans. If your company has recently grown in size and there are frequent complaints about mismatch between charges and plans, a billing software is essential for successful running of your business.
How to Choose a SaaS Billing Solution?
Conduct a comparison of pricing structures
The pricing structure of diverse software solutions is likely to differ. Your eligibility for enterprise-level pricing, which is completely adaptable to your requirements (including processing multiple currencies), may depend on the volume of your payments.
Alternatively, you may be subject to a usage-based pricing plan or a flat monthly or yearly charge. It is important to review the inclusions in these fees as certain services, such as a subscription management system, may require additional fees.
Examine the API documentation to evaluate the level of difficulty in integrating
API (Application Programming Interface) facilitates the integration of your software with your billing platform. If the API is open, it indicates that the SaaS provider has provided its code through documentation so that your team can offer distinct features and services, including recurring billing or invoicing.
The complexity of this procedure can differ among payment partners, and hence, it is crucial to examine any API documentation to determine the time required for setting up key systems.
Understand what level of Customer Support a Partner Will Provide
Providing round-the-clock customer support is crucial for payment partners who handle payments on behalf of other merchants. In case of an outage, customers will approach the payment partner for an explanation.
It is necessary to have access to a support team through various communication channels like email, live chat, or phone to quickly resolve any issues. It is also important to inquire about the resources that the potential partner offers for troubleshooting, such as webinars, guides, and video tutorials.
Which Features to Look Out for?
While every company has its own list of business needs, it is important to look out for a few basic features when considering adopting SaaS billing solutions, including:
- Personalization: customized on-boarding and tracking based on customer needs.
- Effective Billing Management: Apart from the management of recurring billing, setup fees, automatic renewals, transactions where the card is not physically present, and other related functions.
- Essential Analytics: Real-time access to KPIs such as MRR, Payment Processing Velocity, ARR, Attachment Rate etc.
- Smart Dunning: Ability to use credit card retries and notifications for updating card details to recover revenue and avoid losing subscribers from the sales funnel.
Final Word
SaaS businesses have a competitive landscape, but with the right SaaS billing solutions (based on your unique business needs), your company would be better equipped to retain long-term customers, generate a higher ROI, and streamline revenue.